In the midst of the worst recession the automotive world can remember, and surrounded by ever-worsening conditions, Chang'an will soon begin building compact vehicles in Mexico as it inches closer to its ultimate plan of a debut in the U.S. market.
The company has recently become a relevant player in China, not only manufacturing cars for its joint-venture partners, but also as an independent automaker. Chang'an markets its own cars under the Chana brand and is expected to incorporate three of its small models that are currently sold in China: Benben, Zhixiang and Yuexiang.
Last month, Chang'an President Xu Liuping and Autopark President Juan Manuel Vinos signed an agreement in Mexico to build a plant, most likely in central Mexico, with annual production of 50,000 vehicles.
Initially, the venture will serve Mexico and Latin America, and eventually when the cars pass U.S. regulations, it intends to sell its products in the United States. By the end of this year, while the plant is still under construction, Chang'an will begin exporting finished units from China to Mexico. It has not been reported when the first cars will come off the assembly line from the Mexican facility.
Chang'an joins other two Chinese automakers with similar plans: First Auto Works (FAW) and Geely. The Mexican government requires new automakers to invest at least the equivalent of $100 million and produce at least 50,000 units. So far, only FAW is selling cars in Mexico, through its alliance with its Mexican partner, Ricardo Salinas Pliego, media mogul and majority owner of bankrupt Circuit City. Import records show that approximately 5,000 cars have been imported from China since last year.
Inside Line says: Will Chang'an be a major threat to U.S. automakers, or a future employer of U.S. automotive talent? — Loriana Marietta, Correspondent
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